Baby Boomers are staying put and their kids are sticking with them.
A study released Thursday by Trulia examined the housing situations of homeowners 65 and older and compared it with a decade ago.
It uncovered a 3.4% jump in the number of seniors working in 2016 compared with 2005, and a 1.7% increase in the number living with younger generations.
It also showed that seniors appear to be holding off on downsizing just the same as they were 10 years prior.
Only 5.5% of seniors moved,according to Trulia, and of those who did, the split was pretty even between single-family and multifamily residences.
But Trulia analyst Alexandra Lee points out that while the percentage of downsizers hasn’t changed, the number of those moving actually has.
“Because the Boomer generation is so much larger than previous generations, that 5.5% moving rate translates into very different raw numbers across the years,” Lee wrote. “There were about 7 million more senior households in 2016 than 2005, meaning 386,000 more senior households moved in 2016.”
The age at which seniors decide to downsize has also shifted. The survey revealed that in 2005, seniors were moving into multifamily residences by age 75. By 2016, this had moved to 80.
The study sought to examine whether Baby Boomers holding onto their homes was driving up home prices. In looking at the nation’s top 100 metros, it determined that Boomers were not eroding affordability.
“Like the general population, seniors in expensive and unaffordable metros rent at much higher rates,” Lee wrote. “The higher the income required to purchase the median home, the lower the proportion of senior households that could downsize.”
The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index in the US rose 6.6 percent year-on-year in April 2018, easing from a downwardly revised 6.7 percent increase in March and missing market expectations of a 6.8 percent advance. Seattle recorded the biggest increase (13.1 percent), followed by Las Vegas (12.7 percent) and San Francisco (10.9 percent). Meanwhile, the national index, covering all nine US census divisions rose 6.4 percent, down from 6.5 percent in the previous month. Case Shiller Home Price Index in the United States averaged 161.11 Index Points from 2000 until 2018, reaching an all time high of 210.17 Index Points in April of 2018 and a record low of 100 Index Points in January of 2000.
Homeownership was crawling slowly back from its record low two years ago, but it just stalled, and the youngest homebuyers are behind that.
Millennials had been driving the nation’s overall homeownership rate, showing the biggest gains throughout 2017, but they dropped back in the first quarter of this year.
Millennial homeownership fell from a three-year high of 36 percent in the fourth quarter of last year back to 35.3 percent in the first quarter of this year, according to the U.S. Census. Meanwhile, the homeownership rate for Americans aged 35 to 64 rose.
That caused the overall homeownership rate to stall at 64.2 percent, unchanged from the last quarter, after rising steadily from 63.6 percent one year ago. Homeownership fell to a 50-year low of 62.9 percent in 2016, after the worst housing crash in history.
The culprit is pretty clear: weakening affordability. Home prices have jumped dramatically in the past year, and the gains accelerated in the first quarter of this year, as the supply of homes for sale continued to drop to record lows. Mortgage interest rates also surged at the start of this year to the highest level in four years.
“Millennials make up the largest share of those seeking starter homes, a portion of the market that saw inventory plummet 14.2 percent and prices leap nearly 10 percent year-over-year in Q1 2017,” wrote Cheryl Young, a senior economist at Trulia.
The supply of starter homes is so lean that March sales were down in that sector over 21 percent compared with a year ago, according to the National Association of Realtors. Sales of higher-priced homes gained.
Homebuilders are moving some production to the lower end, but their focus is on move-up and luxury homes. The median price of a newly built home jumped 5 percent in March annually, reflecting not just housing inflation, but a continuing mix-shift to more expensive homes.
“The homeownership rate climbing out of its 50-year low should be seen as an opportunity for builders in the for-sale space,” noted Young. “The sharp increase in renter households coming out of the Great Recession has finally begun to moderate as older millennials and Gen Xers shift into homeownership, presenting a boon for new construction.
Vacancy rates are down for both owned properties and rentals, meaning there will be no easing of today’s high rents, which should be another impetus for renters to become homeowners. But those high rents make it hard for young buyers to save for a down payment.
And mortgage rates are continuing to move higher. The average rate on the popular 30-year fixed averaged 4.58 percent for the week ended April 26, up from 4.47 percent the previous week and 4.03 percent the same week one year ago.
“Mortgage rates are now at their highest level since the week of August 22, 2013,” said Sam Khater, chief economist at Freddie Mac. “Higher Treasury yields, driven by rising commodity prices, more Treasury issuances and the steady stream of solid economic news, are behind the uptick in rates over the past week.”
Some old bathrooms are charming; claw foot tubs, sea foam tiles and pretty pedestal sinks can bring an amazing vintage vibe. Other old bathrooms are not so charming; they just look sad and out of date. If you’re brushing your teeth under Hollywood bulbs; bathing in a jetted, almond-colored tub; or storing your toiletries in an oak-encrusted medicine cabinet, there’s a good chance your bathroom’s among the latter.
Not sure where your bathroom stands? Here are a few signs that your bathroom could use an update:
1. Unfit Flooring
If you’ve got carpet in your bathroom, it’s time to replace it. Bathroom flooring is meant to endure years of heavy moisture and foot traffic. Not only is carpet susceptible to moisture damage and mold, but it also collects bacteria from your toilet. Gross.
The fix? Swap out sullied carpeting for large-format tiles in ceramic or natural stone. Or, consider hot trends like patterned tiles or laminates and ceramics that look like hardwood flooring. You may also want to look into a handicap accessible bathroom design, that way the bathroom is usable for everyone. Then, get that cozy carpet feel with a machine-washable bath mat.
2. Comatose Countertops
Boring old countertops can really drag a bathroom down — and rounded, mega-mauve countertops like these are a telltale sign that your bathroom saw its heyday in the 1990s, you can get some new furniture and even find a Huge selection of home furniture too at bathroomsandmorestore.co.uk.
The fix? Ditch the flat Formicas in favor of natural stone, engineered quartz or an up-to-date solid surface. Or, consider painting your countertops for a real budget-friendly solution. The key to modernizing your bathroom countertops is to focus on clean lines and earthy, neutral colors and textures.
3. Glaring Glamour Bulbs
Exposed bulbs were once the telltale sign of a glamorous bathroom upgrade. These days, they’re just the telltale sign of a dated space.
The fix? Updating your lighting is one of the cheapest and easiest ways to modernize your bathroom. Renew your vanity lighting with a pair of LED sconces placed on either side of the bathroom mirror. Or, install an updated bathroom bar that includes a white or frosted shade for each bulb to soften the light.
4. Unfashionable Fixtures and Accessories Dull, clear-knobbed brass faucets; plate mirrors; and bathroom fixtures in beige, bisque and bone are anything but current — and industry experts are even declaring whirlpool bathtubs to be past their prime.
The fix? Think clean and crisp. White fixtures; framed mirrors; and sleek faucets in chrome, nickel or gold will go a long way in helping you modernize an outdated bathroom. And, if you’ve got the room and the budget to swap your old bathtub for a deep, free-standing soaker, you’ll create the kind of modern bathroom oasis that will impress and inspire your neighbors and friends.
5. Overworked Oak
There’s no denying the fact that golden-toned oak had a respectable run as the go-to bathroom cabinet material, but there’s also no denying the fact that the reign is over. And, if you’ve got old oak in your bathroom, there’s a good chance it’s looking a little worse for wear anyhow.
The fix? There are a number of ways to update tired bathroom cabinets, whether they’re made of oak or another material altogether. The first is paint; refacing your cabinets can give your bathroom a whole new look and feel at a far lower price point than an all-out replacement. The second option is to spring for new cabinets. In either case, think maximum storage in simple design — and opt for whites, refined neutrals and up-to-date wood finishes.
WESTCHESTER COUNTY, NY — Real estate sales in the lower Hudson Valley slowed a little in the third quarter of 2017, according to a report from the Hudson Gateway Association of Realtors. That is because prospective homebuyers were operating in a market that has seen reductions in the supply of for-sale housing over the past four years.
In terms of price, the market is still strong.
“The 2017 year to date sales figures continue to trend significantly higher than the previous year for most of the lower Hudson region,” they said. (For more stories on local real estate, sign up for Patch’sdaily newsletter, news alerts and updates.)
Meanwhile, the double-digit percentage rate of shrinking inventory is continuing, HGAR officials said: down 16 percent in Orange, 16 percent in Putnam, 15 percent in Rockland and 8 percent in Westchester as compared to third quarter 2016.
They predicted the market will remain vibrant, citing . conditions including attractive mortgage rates, high employment and a healthy economy.
Contracts for new single-family home sales fell more than expected in April, declining 11.4% to a 569,000 seasonally adjusted annual rate according to estimates from the joint data release of HUD and the Census Bureau. The decline occurred after solid, positive revisions for new home sales for the first three months of the year.
All told, total new home sales for 2017 stand at 210,000, a 11.3% gain over the 2016 comparable total of 189,000.
NAHB expects new home sales to continue to progress along the established, modest growth trend due to ongonig job growth, improving household formations, continuing favorable housing affordability conditions, and tight existing home inventory.
Inventory growth continued in April. After hovering near 240,000 for most of 2016, inventory has now risen to 268,000. The current months’ supply number stands at a healthy 5.7. Given tight existing inventory, more new homes are required to meet housing demand.
The most recent data also indicate a growing share of homes not-started in builder inventory. For example, on a year-over-year basis, homes under construction in inventory have increased by a little more than 6% over the last year. Completed, ready-to-occupy homes (there are only 59,000) are up 2% since April of last year. In contrast, homes not-started listed in inventory have increased 42%, from 36,000 in April of 2016 to 52,000 last month.
Pricing data in the April report find that the median sales price of new homes sold in April was $309,200, while the average price was $368,300. These levels are below the 2016 annual totals but remain higher than the 2015 data.
Regionally, all areas saw monthly declines in sales in April. Sales were down 26% in the West, 13% in the Midwest, 8% in the Northeast and 4% in the South. As with the national headline number, the monthly numbers obscure growth for 2017. On a year-to-date basis, new home sales are up 26% in the Midwest, 15% in the Northeast, 10% in the South and 7% in the West compared to April of 2016.
After increasing and leveling off in recent years, new single-family home size continued along a general trend of decreasing size during the start of 2017. This change marks a reversal of the trend that had been in place as builders focused on the higher end of the market during the recovery. As the entry-level market expands, including growth for townhouses, typical new home size is expected to decline.
On a less volatile one-year moving average, the recent trend of declines in new home size can be see on the graph above, although current readings remain elevated. Since cycle lows (and on a one-year moving average basis), the average size of new single-family homes is 10% higher at 2,624 square feet, while the median size is 14% higher at 2,402 square feet.
30-year fixed-rate mortgage (FRM) averaged 4.15 percent with an average 0.5 point for the week ending Feb. 16, 2017, down from last week when it averaged 4.17 percent. A year ago at this time, the 30-year FRM averaged 3.65 percent.
15-year FRM this week averaged 3.35 percent with an average 0.5 point, down from last week when it averaged 3.39 percent. A year ago at this time, the 15-year FRM averaged 2.95 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.
Quote Attributed to Sean Becketti, chief economist, Freddie Mac.
“For the last 46 years, the 30-year mortgage rate has been almost perfectly correlated with the yield on the 10-year Treasury, but not this year. From Dec. 29, 2016, through today, the 30-year mortgage rate fell 17 basis points to this week’s reading of 4.15 percent. In contrast, the 10-year Treasury yield began and ended the same period at 2.49 percent. While we expect mortgage rates to fall into line with Treasury yields shortly, this just may be a year full of surprises.”
If you own a home and you’ve visited real estate information websites Zillow, Trulia, Redfin, or any of the like recently, you’ve probably noticed an interesting trend: Your home is increasing in value at a rate that’s far and away higher than the national rate of inflation.
Is housing bubble 2.0 around the corner?
According to the S&P Case-Shiller Home Price Index, which tracks residential real estate prices nationally, as well as within 20 large metropolitan regions, residential real estate prices rose 5.3% between Aug. 2015 and Aug. 2016. By comparison, the national measure of inflation, the Consumer Price Index, has moved higher by a little more than 1% over the trailing 12-month period.
If we back the data out a bit further, the outperformance of housing prices becomes even more apparent. Real housing prices — essentially home price increases with inflation backed out — have risen by 25% just since 2012, and are now sitting at their highest point since the Great Recession. This is noteworthy considering that in the 107 years between 1890 and 1997, housing prices generally tracked the national inflation rate very closely, at least based on data from Robert Shiller in the book Irrational Exuberance. Only over the past two decades have we witnessed a diversion from the mean, with the first diversion leading to a massive housing bubble that’s still fresh in the minds of many homeowners.
This latest outperformance in housing prices, as well as the fresh memory of the recent housing collapse less than one decade prior, has some pundits predicting that housing bubble 2.0 could be right around the corner. A Dec. 2015 interview with 66 industry experts conducted by Zillow found that more than 10 believed the Boston, Los Angeles, and Miami markets were at risk of entering a bubble, while even more pundits believed New York and San Francisco were already there.
However, it’s possible these industry experts could be completely wrong. Based on the evidence available at the moment, I’d contend that we’re not even close to a bubble in housing prices, and that home prices could very well outpace the national rate of inflation for many years to come.
Let’s have a closer look at why home prices could keep soaring.
1. Supply constraints
The biggest factor that could push home prices continuously higher is the trade-off between homebuilder supply and homeowner demand. According to Jesse Edgerton, an economist at J.P. Morgan, most national markets simply don’t have the homebuilder supply to meet demand, and that’s unlikely to change anytime soon.
One might wonder if these high prices reflect growing demand that could soon elicit a wave of construction that would prove our forecasts wrong. We find, however, that high prices are concentrated in markets where supply is constrained by geography or regulation, suggesting there may be little room for additional construction.
Data from J.P. Morgan indicates that while housing prices are rebounding rapidly from their recessionary lows, homebuilders appear content in increasing their supply at only a modest pace. Furthermore, the areas where an expansion of construction would appear to be beneficial — San Jose, Los Angeles, San Francisco, and so on — are also the areas that are the most limited in their ability to respond to an increase in demand.
It’s tough to predict how homebuilders will respond if prices continue to climb. For some builders, the allure of profits may be too great to ignore. However, if homebuilders can prudently manage their supply growth, they’ll likely encourage home prices to head higher at a rate that handily outpaces inflation.
2. A continuation of the low-lending-rate environment
Secondly, the ongoing low-lending-rate environment should continue to spur demand for new homes.
A home is arguably the largest purchase Americans will make during their lifetimes, and historically low mortgage rates could be the catalyst that coerces prospective homeowners to pull the trigger. Even more appealing is the fact that many Americans have far better FICO credit scores than they had a decade prior, meaning they’d probably qualify for sweeter deals from lenders.
Based on data released by FICO last year, the national average FICO score of 695 was an all-time high. Comparatively, the national average FICO score in Oct. 2005 was 688. FICO’s data showed a 3% increase in the number of consumers with a FICO score above 800 compared to the prior decade (FICO scores max out at 850), with a 2.1% decline in consumers with a FICO score under 550. Long story short, Americans appear to be in better shape than ever when it comes to getting a mortgage.
Though the Federal Reserve is the “X factor” here, and it can be completely unpredictable, the case for raising the federal funds target rate isn’t that strong. Inflation remains below the Fed’s target level, job creation has been up and down in 2016, and external factors, such as Brexit and China’s slowing GDP growth, could weigh on the growth outlook in the United States. After aiming for four interest-rate hikes in 2016, it’s quite possible the Fed ends the year without making a single move, which favors the continuation of a low-lending-rate environment.
3. The “rent” vs. “buy” trade-off
Over the longer term, the trade-off between renting and buying a home would also seem to favor rising housing prices.
If interest rates do normalize over the long term and head back to around 3%, it would presumably work in favor of the rental market. Higher interest rates mean higher mortgage rates, which in turn should push on-the-fence homebuyers back into renting. When this happens, landlords become privy to significant rental pricing power and are able to increase rental rates well above the national rate of inflation. Just the expectation of rising interest rates at some point soon has been pushing rental prices around the country higher, at a pace that’s well above the national inflation rate.
However, there comes a tipping point in the renting vs. buying trade-off where rental prices increase enough that buying a home actually becomes the cheaper option on a monthly basis. It happened to me in 2007, and it could very well happen to millions of Americans as rental inflation increases.
Never ones to shy away from throwing in alltheplants, Vietnamese architecture firm Vo Trong Nghiatakes the roof terrace to the next level in this new home in Nha Trang, Vietnam. The firm, working in collaboration with architect Masaaki Iwamoto, made the most of local construction rules—which required a sloped roof that’s at least half-covered in grey or terracota tiles—by creating a dreamy stepped garden brimming with all sorts of flowers, trees, and shrubbery.
The living spaces underneath are like an extension of the garden. Built around airy, vegetated interior courtyards, the living, dining, and bedrooms feel breezy and lush. The polished wood plank floors, white brick walls, and high ceilings certainly also help bring in as much light as possible.